Negotiate credit card debt » Minimum Payments

Eliminate Credit Card Debt – Reduce Debt without Bankruptcy

admin — Tue, 05 Oct 2010 15:20:55 +0000

Acquiring too much debt can put a major strain on a household. To eliminate debt, many people consider bankruptcy. With the new bankruptcy laws, it has become difficult for some people to eliminate debt. However, many will continue to qualify for bankruptcy protection. The effects of bankruptcy are long term. Before considering bankruptcy, it helps to explore solutions to debt elimination. Here are three tips that can help reduce debts.

Limit Credit Card Use and Pay More than Minimums

People file bankruptcy with varying credit amounts. Some have acquired over $10,000 of credit card debt, whereas others only have about $2,000. Individuals with small debts can usually payoff the balances without bankruptcy. However, these persons must be willing to make sacrifices.

If attempting to eliminate debt, stop using the credit card. Paying only the monthly minimum, and then going on a shopping spree defeats the purpose. Before you can successfully eliminate credit card debts, you must commit to using cash for all purchases. Additionally, the majority of minimum payments barely reduce the finance fees. To notice a significant reduction, endeavor to pay the minimum payment, plus an additional $50 – $100.

Negotiate a Lower Interest Rate

If you have maintained a good payment history with a credit card company, attempt to negotiate a lower interest rate. When contacting the credit card company, highlight your history with the company such as length of credit account, payment history, etc. If your credit is good, the company may consider a reduction. Before approving the request, you must consent to a credit check.

In addition to evaluating your history with the company, they will also assess whether you maintain a good payment record with other creditors. If your credit score is low, it may require the help of a debt consolidation agency to convince creditors to lower interest rates.

Once your credit card interest rate is lowered, you pay less finance fees. Thus, a larger portion of your monthly payments will help reduce the outstanding balance.

Consolidate Debts with a Home Equity Loan or Refinancing

Owning a home provides a huge advantage. Homes increase in values, thus they gain equity. As a homeowner you have the option of tapping into your home’s equity. Through a home equity loan or refinancing, you have the chance to get hold of a lump sum of money that can be used for different purposes. One such purpose includes debt consolidation.

Also, try using one of ABC Loan Guide’s
Recommended Credit Card Debt Elimination Companies.

By: Carrie Reeder

How To Avoid Bankruptcy & Get Out Of Debt Faster Using Debt Negotiation!

admin — Wed, 23 Jun 2010 08:31:57 +0000

Has credit card debt got you thinking about bankruptcy?

You’re not the only one these days. Even with the new bankruptcy laws, credit card debt continues to climb. Unfortunately for most of us, our paychecks don’t climb as quickly.

If you’re on the verge of bankruptcy, you may have another alternative.

Debt negotiation is a process where you negotiate with your creditors to pay off your debts at a reduced amount – for example, if you owe $12,000, you can negotiation a payoff of $5,000. The benefit for the creditor is that they get more money than they may have through bankruptcy, and they get the money sooner. The benefit for you is obvious – you get out of debt faster, and save lots of money in interest.

Where do you get the money to pay off the debt?

Take the money you would have normally used to pay your credit card bills, put it aside, and when you accumulate enough to pay off the debt, send in the reduced amount you agreed to.

If this sounds confusing, that’s ok. It’s really not.

There are many professional companies that will do all the work for you, and charge you a percentage of the savings.

I can speak from experience (I built up a lot of debt trying to start a sporting goods business, which didn’t quite work out) that even with the fees, this is a good deal – plus you save a lot money by not having to pay the high interest rates on your credit card bills.

Sure, it is a more aggressive approach to getting out of debt than making minimum payments, using credit counseling, getting a debt consolidation loan, or borrowing from a friend or relative. But in the end, you’ll get out of debt faster…

And avoid bankruptcy!

If you’ve never heard of debt negotiation (also called debt settlement), that’s ok too, not many people have. I didn’t until I began to seriously consider bankruptcy.

One reason many people are hesitant to consider debt negotiation is that it goes on your credit report. Sorry to tell you, but having lots of debt (even if you pay on time), making payments late, even credit counseling – all go on your credit report and can negatively effect your credit. And (of course) bankruptcy is a big negative!

In my case, getting out of debt, removing all the financial stress, and being able to live a normal life were well worth it. With so much debt, having good credit was meaningless anyway.

Plus, I was able to get all but one of the negative items off my credit report (that’s a topic for another discussion), and my credit is now back to normal. In fact, I now get more credit card offers than I can handle – and fortunately, I can now throw them all in the trash!

When money is tight, and debt is high, there aren’t many simple answers.

But if you are already considering bankruptcy, then debt negotiation might be the right alternative to help you get out of debt faster!

By: Kris Bickell

Does Debt Settlement Affect My Credit?

admin — Tue, 20 Apr 2010 05:31:00 +0000

When dealing with any type of debt negotiation plan, one of the first questions asked is always “Will this affect my credit score?” The short answer is yes. Anything that does not constitute paying your creditors the full amount in a determined time will most likely reflect negatively on your credit score.

Nevertheless, the complete answer to this question is much more complicated and one must analyze the reality of the situation above all. Anyone who is seriously considering debt settlement is most likely in a situation where they could possibly be making late payments, behind on payments, or unable to make minimum payments. In other words, they are individuals who are already facing possible credit score problems. These issues can affect your credit score in just the same way as joining a debt settlement plan, if not worse. The benefit of the debt settlement plan is that you are making positive progress toward eliminating your problem.

In this situation, one must prioritize. What sounds better: solving your financials problems, but having your credit score suffer or having your credit score stay the same and watching your debt grow exponentially? And to make matters worse, if you are already experiencing financial difficulties, the odds are that your credit score is going to take a hit no matter what. The important thing to analyze is what is your main goal? If for you, the most important goal is to reduce your debt and begin to manage your financial situation more, then you might just have to suck it up and realize that there may be consequences along the way that you don’t like, but that are necessary for you to reach your final goal. After all, let’s say that after two to three years you become debt free, but as a result your credit score is significantly lower than what you want. You will then have the financial independence to begin rebuilding your credit score, which can take 6 months to a year in an average case.

I guess my point is the following. Why are you worrying about secondary issues and ignoring what is most important?

If you still have concerns, try contacting a Debt Settlement specialist who can help you with your specific situation.

By: Scott Wallitsch

Credit Card Debt Help

admin — Thu, 15 Apr 2010 16:39:31 +0000

Do you have credit card debts that are way behind and you feel like you will never get them paid off? There are some secrets that you need to know to credit card debt help. There are ways to get them paid off for less than what you owe and faster than you would have ever thought. Here are a few options for you to get rid of your credit card debts.

First, if you own a home, then you should consider refinancing your mortgage or taking out a second mortgage. You need to make sure this will give you enough money to pay off your credit cards. After you pay them off you need to cut up the credit cards and stop using them completely. The last thing you want to do is end up right back in the same situation again.

Second, you can get a new credit card. Sure this sounds strange, but if you have a good amount of monthly income and decent credit you can get a credit card with a high limit and transfer the balances from your other cards to it. This needs to be a low interest credit card and you need to make sure it has a large enough limit to cover all your other cards.

Last, you can pay them off all yourself. Set up your budget and figure out what you can afford to use towards your debts each month. Then, start with your smallest credit card debt and work your way to the largest one. If you have any that are not past due make sure you continue to make the minimum payments so that they stay on time.

Getting credit card debt help is not easy and you need to be very disciplined. Have patients and know that it will take some time to get out of debt, but once you do you will be much happier.

By: Gressly Stevens

Credit Card Debt Solutions

admin — Sat, 10 Apr 2010 15:20:23 +0000

You know you need to start getting rid of credit card debt. But what are the credit card debt solutions?

Every month you whip out your checkbook and make payments for ever increasing minimums. It’s vitally important to control spending. And its even more important to devise a program now, before it becomes difficult to get the cards paid off. I know it makes sense, but many people overlook the fact that the best credit card debt solution is to stop incurring debt!

Borrow money only when it becomes a necessity, and then, only grudginly. Your minimum payment won’t do. If your making only minimum payments on your cards, your doomed to be making those payments for the rest of your life. Credit cards are convenient. They can be an effective way to manage spending if used properly.

If you belong to a credit union, you may have a great credit card debt solution available to you. See if you can take out a very low interest unsecured personal loan and pay off your credit cards. This can reduce the amount of money that you are bleeding to interest and you can pay off the balance much quicker.

Another debt solution may be to see if you can arrange a loan against an investment such as stock or your 401K. I don’t think this is the best method. But it is important to come up with a solution to the credit card debt. If your earning 5 or 6 percent on your retirement account, but paying 12 of 16 percent or more on your credit cards it just doesn’t make any sense not to pay them off.

Some stock brokerage firms will allow you to borrow against the value of your stock. Basically what you are trying to do here is pull out all the stops. The interest you are paying on your credit card debt is likely far more than the amount that you are earning on your investments. If you are paying 14 percent average interest on your credit cards, then any payment you make that reduces their balance is a guaranteed 14% return on your money.

If your balance is small perhaps one other credit card debt solution is to borrow from a friend or relative. This is my least favorite, but it works. Just make sure that you destroy the card after it is paid and make sure you pay your friend or relative back. Hopefully they won’t be charging you large amounts of interest!

Can you work some overtime. Perhaps get another job for a short period of time. Have a garage sale. Sell some of your collectibles on eBay. What about that car in the garage you never got around to restoring? These are all viable solutions. You have to make a commitment to getting out of debt at any legal cost.

There are a lot of credit card debt solutions. Look at all of them, and see which will fit with your lifestyle. The goal is to get out of debt, stay out of debt, and get on with your life.

By: Ted Batron

Using Creditor Negotiation to Get Out of Debt

admin — Fri, 09 Apr 2010 05:56:09 +0000

Dealing with serious debt is one of the most difficult problems that Americans face today. Fortunately, you do not have to face the hardship alone. Companies focused on debt relief exist to help people pay their bills and stay financially afloat. The United States Organization for Bankruptcy Alternatives is interested in improving bad situations for both creditors and lenders. Even if your back is up against the wall, there is help to be found if you know where to look. Creditor negotiation in the form of debt settlement is a great solution for many people facing debt. With the right help, a third party company can create a resolution that makes everybody happy.

Creditor negotiation is such a valuable tool because it actually reduces the amount you have to pay. With a smaller burden each month, you can pay back your creditors over time with confidence. By negotiating a payment plan that meshes with your budget, you can pay your bills without worry and live a life you can truly enjoy. Eventually, by following your payment plan, you will be debt free. What a feeling!

The benefits of debt settlement are clear. So what is the downside? If you are forced to settle your debts for less than their original value, you become a greater risk for future lenders. Creditors naturally prefer lending money to people with a history of full repayment, so debt settlement may make it difficult to acquire low interest loans in the future. Of course, it is better to bear this risk than to face bankruptcy, which will damage your credit score anyway. The other main concern with debt settlement is that not everyone qualifies. Creditor negotiation is not for people who just want a little relief with their medium sized debts. You must have a large amount of debt to qualify. In addition, you must be having difficulty making minimum payments. Basically, debt settlement exists for people who critically need help paying their excessive bills. Finally, you must have a regular income in order to make monthly payments over a period of time, often several years. If you are unsure whether you meet the qualifications for debt settlement, seek financial consultation with a trusted institution in your area or online.

Tactical creditor negotiation is a complicated and intense process. To get the procedure started, find a third party firm that is a member of the United States Organization for Bankruptcy Alternatives. You want a company that will work for you to reduce your payments as much as possible. By working for you, their client, good companies can eliminate up to half of your total debt. Be sure that the company you choose is one you trust with these important negotiations. Perform as much research as possible before coming to a final decision. The creditor negotiation process works because serious debt puts both debtor and creditor in a tough position. If the situation does not change, the creditor may end up with nothing due to the debtor’s complete inability to pay. Most creditors would rather work with a trusted financial intermediary in order to secure a portion of their money instead of dealing with the risk of receiving nothing.

You want to find a company with a history of success to negotiate on your behalf. Companies differ in their payment schedules, accreditations, fees, and reputations. Spending the time to shop around is the best way to ensure that you make the right choice. Look for companies that offer unbiased financial consultation that doesn’t try to impress you with monthly payments that seem too good to be true. Be wary of companies that make creditor negotiation seem simple. Debt settlement is a complex process, so you need a deep analysis of your individual situation in order to fully understand what is happening with your debt. Good luck, and remember to make a careful, calculated decision concerning your debt!

By: Andy West

Is Getting Out of Debt Really All That Hard?

admin — Wed, 24 Feb 2010 06:19:17 +0000

As of the moment we are in the midst of a pretty bad economic recession. People have been losing their jobs, businesses have been going under, and we are hitting record numbers with home foreclosures. To top all of this off we are seeing American consumers hit a record high with credit card debt. Now what most people do not know is that getting out of debt is not all that hard if you take the right steps.

For starters most people do not know what options they have available to them in order to get out of debt, however before going into any of those options debtors must be made aware that pretty much anything they do to get out of debt will have a negative credit effect. Unless the debtor has the money to pay off the debt in full, which ninety nine percent of people do not. The number one priority when trying to get out of debt should be exactly that, getting out of debt, not worrying about keeping a great credit score. A credit score is something that changes like the wind and can be repaired at a later date, and besides when you’re in debt you should not be worrying about how to get yourself into more debt in the future.

With that being said there are two main debt relief programs available to people trying to get out of debt. There is consumer credit counseling and there is debt settlement. Both have their respective pros and cons.

A credit counseling program is one that boasts the benefits of reducing interest and consolidating payments into just one. So instead of making numerous payments throughout the month to your creditors you just make one to the credit counseling agency and they will pay the creditors for you. Plus the creditors will lower the interest on these types of plans. The problem is that for many people the payments will still simply be too much. Often times the payments are just as much if not more than what people are putting out on monthly minimum payments.

With credit counseling people can look to get rid of their debt within 5-7 years and look to pay back around 135% of what they currently owe. Another issue with credit counseling is the low success rate, because if just one payment is missed often times the creditors will kick the consumer off of the program, thus bumping the interest back up. And yes there is a negative effect on the credit, a credit counseling plan will be shown as a code 7 on the credit report which looks bad. But the bottom line is to get out of debt and with this plan money and time will be saved when compared to riding out the monthly minimum payment scheme for what could be decades.

Now there is another debt relief plan called debt settlement. The benefits of this program are the savings of money and time. Most debtors find themselves saving around fifty percent of what they owe today, and can realistically get out of debt in just a few years. The downside to this program is that in order to achieve a debt settlement the consumer must let the accounts fall into default, thus putting the creditors in a position to negotiate a settlement. So obviously this will have a negative effect on the credit score. However once the settlements start coming in the credit score will rebound and repair itself naturally.

Right now with the state of the economy debt settlement has been a very lucrative debt relief method for many people. The creditors have been negotiating very low settlements, much lower than they do when the economy is doing better. Many people are finding they are saving a tremendous amount of money with this option and find themselves getting out of debt very quickly.

Like I said in the title, getting out of debt is not all that hard. The vast majority of people would be able to manage one of these two types of programs. The only thing that holds most people back is the apprehension of their credit score being affected. This is quite a shame that the creditors have so many people kneeling at the alter of FICO, that they do not realize they are losing thousands of dollars to the credit card companies with no end in sight. With the way things have been going in the economy people are going to need all the money they can get and throwing away money to high monthly minimum payments may be the straw that breaks the camels back for millions of American families and puts them into very precarious financial situations.

By: Stephen Bis

Compare Debt Negotiation Vs Credit Counseling

admin — Sun, 07 Feb 2010 06:19:25 +0000

Two of the most common options to help you deal with debt problems include debt negotiation and credit counseling. Today we compare debt negotiation vs credit counseling and discover why one option may be better for you than the other. Both options are designed to help you get your credit card debt under control.

First let’s take a look at debt negotiation.

Debt negotiation is the American way. You can haggle with your creditors and work out an agreement that both of you aren’t 100% satisfied with but will accept to reach a compromise on your accounts.

You use debt negotiation when you are having trouble keeping up with your minimum payments.

You can ask for a longer payment period, a reduction in the minimum monthly payment required, a lower interest rate, or even possibly a reduction in the principal balance.

The best benefit of debt negotiation is you can negotiate one lump sum payment to wipe out your entire balance in one fell swoop. This is also known as a debt settlement.

The disadvantage of credit card negotiation is that your creditors will usually not be willing to negotiate with you unless you are behind on your payments which has a very negative effect on your credit score.

However, this lower credit score can be overcome in a short period of time once you have no more credit card debt and can make all your payments on time in the future.

One last benefit of debt negotiation is you can learn to do it yourself. Your creditors would actually prefer you did it this way instead of hiring a third-party debt negotiation company.

Now let’s take a look at credit counseling.

Credit counseling is when you contact a credit counselor who will work with all your creditors and get them to accept a lower monthly payment stretched out over a longer period of time.

It is similar to debt consolidation.

You make just one monthly payment to the credit counseling service and they distribute that amongst all your creditors.

A credit counselor will also work to cease debt collection calls and get you a lower interest rate.

You may have to pay a small monthly fee of $25-$50 to the service for the administration of your account.

The benefit of credit counseling is your credit score is not as damaged as with debt settlement and negotiation.

One of the disadvantages is your principal is not reduced.

Another disadvantage of credit counseling is the prevalence of fraudulent companies in the industry. You have to do your due diligence and make sure he you are working with a legit company before you send them any money.

This is not a concern with do-it-yourself negotiation.

When you compare debt negotiation vs credit counseling you can see that each auction has its merits. While debt negotiation may be the solution for you, credit counseling may be a better option for someone else. Each consumer situation is unique and there is no one-size-fits-all debt solution that will work for everyone.

With a little bit of homework, you can discover which one is more appropriate for your credit card debt problems.

By: Adam Tijerina

Debt Consolidation Versus Debt Negotiation

admin — Fri, 17 Apr 2009 13:04:21 +0000

Debt consolidation versus debt negotiation are two options that are available to you if you need debt assistance. When your monthly bills become too much for you to handle, it makes sense to use debt consolidation or debt negotiation for solving debt and credit problems.

Debt Consolidation

Debt consolidation services have prearranged debt repayment plans with most credit card and collection companies. When you sign up with a debt consolidation company you are offered a lower overall monthly payment based on a lower interest rate they have arranged with the creditor.

This payment is lower than what the credit card companies offer you, saves you money every month and is often the best way to consolidate debt.

One benefit of a debt consolidation repayment plan is it will stop you from getting harassed by your creditors as long as you make the new, lower monthly payments.

The downside of the debt consolidation repayment plan is that you have to cancel all credit cards that you include in the plan. You are also charged your first payment you make toward the program and an additional monthly administration fee. This administration fee ranges from flat fees of $10-$50, while others charge a $5 fee for each creditor. That means you’ll pay about $30 a month that doesn’t go to paying off your debts.

The debt consolidation program benefits you if you have high interest rates or have higher credit card bills than you can manage. Some people like to make only one payment to one company for all of their debts.

Debt Negotiation

Debt negotiation is sometimes referred to as debt settlement. This is most often offered to people who can’t handle a debt consolidation program. If you can’t make the minimum payments of a debt consolidation repayment plan or haven’t made payments in the past 3 months, a debt negotiation program is the next step for solving debt and credit problems.

One benefit of a debt negotiation program is you stop making payments to your creditors. The debt negotiation company either takes monthly payments from you and keeps it in an account, or lets you keep the money in your own account.

While you are making these monthly payments to the debt negotiation company, they negotiate with your creditors for a lower payoff of around 40-50% of your total amount of debt. Once the negotiated settlement is agreed upon with your creditors, the debt negotiation company makes a one time payment to them.

A downside of the debt negotiation program is it lowers your credit score for as long as you are in the program. However, most debt negotiation companies require the creditor make the credit report show paid in full so it doesn’t show up as a negative on your report once your account is settled.

Some debt negotiation companies include a credit repair service that will remove the negative items caused by the debt negotiation program. You pay for this service as part of their program.

Now that you have an idea what debt consolidation versus debt negotiation is choose which one will work best for solving debt and credit problems for you.

Copyright